The above figure shows the labor market in an undeveloped nation. If the minimum wage is set at $5.00 per hour, what effect will it have on the market for low-skilled labor?
A) The minimum wage will have no effect when set above the equilibrium wage rate.
B) The minimum wage will create a surplus of low-skilled labor.
C) The minimum wage will create a shortage of low-skilled labor.
D) The minimum wage will attract more labor to the low-skilled labor market and cause the wage rate to fall.
B
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Linesha, a college student working part-time received a wage increase. An avid movie buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs. Based on this information
A) DVDs and Blu-ray discs are substitutes. B) the cross-price elasticity between DVDs and Blu-ray discs is negative. C) DVDs and Blu-ray discs are normal goods. D) Blu-ray discs are normal goods and DVDs are inferior goods.
The existence of adverse selection results in:
A) reduced market efficiency B) an increase in the likelihood of moral hazard C) increase market transactions D) higher transaction costs
Which of the following is a criticism of capitalism?
a. Unequal distribution of income. b. Failure to protect the environment. c. Exploitation of workers. d. All of these.
State and local governments spend more on the purchases of goods and services than the federal government
Indicate whether the statement is true or false